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Gasoline Prices Are Not Rising, the Dollar Is Falling


Panic is in the air as gasoline prices move above $4.00 per gallon. Politicians and pundits are rounding up the usual suspects, looking for someone or something to blame for this latest outrage to middle class family budgets. In a rare display of bipartisanship, President Obama and Speaker of the House John Boehner are both wringing their hands over the prospect of seeing their newly extended Social Security tax cut gobbled up by rising gasoline costs.

Unfortunately, the talking heads that are trying to explain the reasons for high oil prices are missing one tiny detail. Oil prices aren’t high right now. In fact, they are unusually low. Gasoline prices would have to rise by another $0.65 to $0.75 per gallon from where they are now just to be “normal”. And, because gasoline prices are low right now, it is very likely that they are going to go up more—perhaps a lot more.................>>>>.................>>>>.............................http://www.forbes.com/sites/lo.....e-dollar-is-falling/

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Inflation-






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Inflationefinition

Most people are familiar with the effects of Inflation. But they are often confused as to the cause.  All they see is rising prices (which can also be viewed as a shrinking dollar) i.e. each dollar purchases less goods and services than it did previously. Unfortunately many people erroneously attribute these rising prices to "greedy businessmen".

Most economists however agree that the cause of this "price inflation" (or shrinking dollar) is "monetary inflation" or the excessive growth of the money supply. They say "excessive growth" because many believe that the money supply needs to grow some (although they disagree on how much).

The reason they think it needs to grow at all is to offset the growth in the Gross Domestic Product (GDP). If the money supply didn’t grow and the GDP did... prices would actually decline (each dollar would buy more). This "horrible" event would benefit savers as their savings allowed them to purchase more and there would be less incentive to go into debt. But the "poor banks" would be hurt because people would be less inclined to borrow money.

Here at InflationData.com we don’t think that is such a bad thing. Sound money that never changes has historically produced the greatest real economic booms. You can not borrow your way to wealth. You can only pretend to be wealthy for a while until reality catches up with you. Currently we are experiencing the results of a false debt inspired boom.

We have been conditioned to believe that the Boom-Bust cycle is a naturally occurring phenomenon but in actuality it is simply a result of government tinkering.

The boom-bust cycle is the result of debt financed over consumption. This consumption and excess debt is encouraged by the government through inflation of the currency supply. As these funds are misallocated people begin living beyond their means and everything appears rosy and politicians take credit for creating wealth out of thin air. But stresses begin to build in the economy which eventually must be resolved and eventually result in the bust phase of the cycle.

Without the misallocation the only cause of recessions would be natural disasters which the free market would prepare for through prudent saving and storage. Inflation and government intervention encourages imprudence and higher risk taking than the market would normally support… eventually resulting in deeper recessions than would have occurred otherwise.

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Note:


We’ve recently merged InflationData.com and our Blog (InflationData.net) into one site. So if you are looking for articles that were located on InflationData.net you can find them from the menu under New Articles. We are hoping this new system will make it easier to find what you are looking for and easier to navigate the site.

The key components on this site are the Current Inflation Rate listed in the box to the right for the current month and in table form for the most recent years. The Historical Inflation Rate is available in table form all the way back to the beginning when the government first began tracking it in 1913.


The inflation rate is actually calculated from the difference between Current Consumer Price Index and the Consumer price index a year ago. So we track the Historical Consumer Price Index.
The Consumer Price Index is calculated monthly by the U.S. Bureau of Labor Statistics. They pick a date and set the index equal to 100 (currently they use an average of the date range from 1982-1984). The index that we use is called the (CPI-U) which stands for "Consumer Price Index for all Urban Consumers".  This is used to calculate what is commonly called the "inflation rate".

The government calculates this to one decimal place. So the typical annual inflation rate would be something like 2.5%. At InflationData.com we calculate the inflation rate to two decimal places since it could actually be 2.45% or 2.54% and it would still be considered 2.5% by the BLS. We feel that the "finer view" will allow us to get a better picture of the economic condition.

Quoted from 147

Just like healthcare.  Docs are raising their prices to insurance companies - so they can get maybe 50c on the dollar that their service is worth ... it's a circle jerk.

Quoted from 147

Just like healthcare.  Docs are raising their prices to insurance companies - so they can get maybe 50c on the dollar that their service is worth ... it's a circle jerk.